The 700+ hedge funds and money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund positions. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Portola Pharmaceuticals Inc (NASDAQ:PTLA).
Is Portola Pharmaceuticals Inc (NASDAQ:PTLA) undervalued? Hedge funds are buying. The number of bullish hedge fund bets increased by 5 in recent months. Our calculations also showed that PTLA isn’t among the 30 most popular stocks among hedge funds.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s go over the latest hedge fund action surrounding Portola Pharmaceuticals Inc (NASDAQ:PTLA).
What does the smart money think about Portola Pharmaceuticals Inc (NASDAQ:PTLA)?
At Q3’s end, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 28% from one quarter earlier. On the other hand, there were a total of 22 hedge funds with a bullish position in PTLA at the beginning of this year. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Partner Fund Management held the most valuable stake in Portola Pharmaceuticals Inc (NASDAQ:PTLA), which was worth $122.5 million at the end of the third quarter. On the second spot was Cadian Capital which amassed $110.6 million worth of shares. Moreover, Deerfield Management, Highland Capital Management, and Everett Capital Advisors were also bullish on Portola Pharmaceuticals Inc (NASDAQ:PTLA), allocating a large percentage of their portfolios to this stock.
As one would reasonably expect, some big names have jumped into Portola Pharmaceuticals Inc (NASDAQ:PTLA) headfirst. Point State Capital, managed by Zach Schreiber, created the most outsized position in Portola Pharmaceuticals Inc (NASDAQ:PTLA). Point State Capital had $17.6 million invested in the company at the end of the quarter. Stanley Druckenmiller’s Duquesne Capital also made a $9.3 million investment in the stock during the quarter. The other funds with brand new PTLA positions are Ken Greenberg and David Kim’s Ghost Tree Capital, Philip Hempleman’s Ardsley Partners, and Israel Englander’s Millennium Management.
Let’s also examine hedge fund activity in other stocks similar to Portola Pharmaceuticals Inc (NASDAQ:PTLA). These stocks are Alexander’s, Inc. (NYSE:ALX), Arch Coal, Inc. (NYSE:ARCH), Evertec Inc (NYSE:EVTC), and G1 Therapeutics, Inc. (NASDAQ:GTHX). This group of stocks’ market values resemble PTLA’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ALX | 8 | 57013 | 1 |
| ARCH | 26 | 379048 | 2 |
| EVTC | 20 | 194210 | 3 |
| GTHX | 20 | 132411 | 7 |
| Average | 18.5 | 190671 | 3.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.5 hedge funds with bullish positions and the average amount invested in these stocks was $191 million. That figure was $455 million in PTLA’s case. Arch Coal, Inc. (NYSE:ARCH) is the most popular stock in this table. On the other hand Alexander’s, Inc. (NYSE:ALX) is the least popular one with only 8 bullish hedge fund positions. Portola Pharmaceuticals Inc (NASDAQ:PTLA) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ARCH might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
